Traders on Polymarket are currently betting against Donald Trump removing Jerome Powell as Fed Chair this year, despite criticisms from the US President. Trump has consistently called for Powell to cut interest rates, which could benefit the crypto market. However, Powell has maintained that it is not yet time to lower rates, leading to tensions between the two.
Data from Polymarket shows that there is only a 19% chance of Jerome Powell being removed as Fed Chair this year. This probability has dropped by 4% in the last 24 hours, despite reports that Trump has privately discussed firing Powell for months, including in meetings with potential replacements.
Donald Trump recently criticized Powell, stating that he is always “too late and wrong” and expressing that he believes the Fed Chair’s termination “cannot come fast enough.” Trump’s dissatisfaction with Powell’s refusal to lower rates, especially in comparison to the European Union’s rate cuts, has sparked debates on whether Powell’s removal is imminent.
The potential removal of Jerome Powell as Fed Chair holds significance for the crypto market, as monetary policies often have a greater impact on crypto prices than other macroeconomic factors. If Powell is removed and replaced by someone more open to rate cuts, it could be positive for the market. Kevin Warsh, a potential replacement, has shown a more crypto-friendly stance, despite previously advocating for Central Bank Digital Currencies (CBDCs) over private stablecoins.
Despite Trump’s dissatisfaction with Powell, the Fed Chair has reiterated that interest rates will likely remain steady for now, with a focus on monitoring the impact of Trump’s tariffs on inflation. Market participants may be more inclined towards a replacement like Kevin Warsh, who could potentially be more accommodating to rate cuts. However, Warsh’s stance on CBDCs may contradict Trump’s policies, as the US President has already taken measures to prohibit the creation of a CBDC.
